Renters insurance costs far less than homeowners insurance. Generally, you can expect to pay $15 a month for renters insurance.[1] However, if you want to save even more money, then there are steps you can take to lower your monthly premiums. Your premiums are based on a variety of factors, such as location and the security features of your building, so you should think about moving if necessary. To find the cheapest insurance policy, you should compare quotes from several different insurers.

Steps

Part 1

Reducing the Cost of Renters Insurance

1

Live in a safe area. Your rate will depend in part on where you choose to live. Prices vary by city and neighborhood, with the safest areas offering the lowest rates.[2] If possible, you can move to a safer neighborhood and reap savings.

Many websites allow you to check crime rates. For example, Neighborhood Scout allows you to search by zip code. You have to subscribe and pay an annual fee of $15.99.[3] Alternately, you could search online for FBI statistics.

You also might end up paying more if you live too far from a fire department, even if your neighborhood is safe.[4]

2

Choose a safe building. An older building carries a higher risk of plumbing and electrical problems, so your renters insurance will be higher to reflect the increased risk.[5] If possible, rent in a new building.

3

Add safety features to your unit. You can reduce the cost of your renters insurance by making a few changes to the apartment that will increase its overall safety. For example, consider making the following:

Accept a higher deductible. The deductible is the amount of money you must pay out-of-pocket before your insurance kicks in. Generally, the higher the deductible the lower your monthly premiums, and the lower the deductible the higher your monthly premiums.[8]

If you choose a $500 deductible instead of a $250 deductible, then you can save around 10%.[9]

5

Lower your coverage limit. The coverage limit is the maximum amount the insurer will pay out if you suffer a loss. For example, you could get a policy with $30,000 in property damage and $100,000 in personal liability. If you lower those limits, then your premium should go down.[10]

You should use an online calculator to estimate how much coverage you need. These calculators will ask you to estimate the value of your possessions, such as your furniture, electronics, and wardrobe.[11]

Part 2

Comparing Prices

1

Obtain multiple quotes. You can obtain quotes from reputable insurance companies online.[12] You also shouldn’t ignore local insurers, who may be less known but still offer excellent coverage.

You can find insurers online by searching for “renters insurance.” Most of the large nationwide insurers will provide online quotes.

You could also call and speak to an agent. The larger insurers have agents scattered around the country. Likewise, a smaller insurer in your city should have an agent available. Look in the phone book.

2

Check about bundling. If you are shopping for other insurance—such as car insurance or life insurance—then you might be able to purchase a bundle with an insurer. Often, you can reap savings by bundling your renters insurance with other insurance policies.[13]

You should call up and talk to an agent. Each insurer has different bundling options.

3

Ask about available discounts. Insurance companies offer all kinds of discounts for a variety of reasons. You should check to see if you are eligible for any. For example, you might get a discount if you have recently quit smoking or never started.[14]

Some insurers also offer discounts if you are a member of AAA, a credit union, or other organization.

If you are retired, you might qualify for a discount because retirees tend to be home more.[15]

You might also qualify for a credit if you belong to a Homeowner’s Association, since insurers assume your neighbors will keep an eye on your property.

4

Compare the policies. Take out your quotes and compare them. Price is clearly important, but it should not be the only factor you consider. Instead, compare the different policies based on the following:[16]

The amount of the deductible. Policy A might have a very high deductible but it is offset by a much lower premium. Meanwhile, Policy B might have a lower deductible but a higher monthly premium. When comparing these policies, you need to consider the likelihood that you will need to make a claim. If you think your risk is high, then you probably want the policy with a lower deductible.

The coverage limit on the policy. Again, consider the likelihood that you will need to make a claim. If you think your risk is low, then you might want a high deductible policy with a low coverage limit. In that situation, your monthly premiums will probably be the lowest.

How the insurer reimburses you. The insurer might use Actual Cash Value (ACV) or Replacement Cost. With ACV, you are paid how much the item is worth at the time of damage. Accordingly, you will receive less money for older items, such as a five-year-old TV, which depreciate in value. With Replacement Cost, you get reimbursed for a new TV.[17] Replacement Cost policies tend to cost 25% more than ACV policies.[18]

Cost of additional options. It might be hard to make an apples-to-apples comparison if one policy offers additional options but others don’t. However, you can consider how important those options are to you.